In recent five years, the S&P 500 gained 24.71% in 2009, 11.65% in 2010, 0% in 2011, 12.1% in 2012 and 17.14% until now. The market performance looks good. Could investors make more money by investing in GuruFocus Model Portfolios? It is time to check the performances. The following are the details of the performances of the four value strategies:

In the first half of 2013, we can see that among the four model portfolios, the portfolio of Buffett-Munger Screener underperformed the S&P 500 by 5.15%, while the other three model portfolios are about even with the S&P 500.

The "Buffett-Munger Screener" can be used to find companies with high-quality business at undervalued or fair-valued prices:

Companies that have competitive advantages. They can maintain or even expand its profit margin while growing its business.

Companies that incur little debt while growing business.

Companies that are fair valued or under-valued. We use PEPG as indicator. PEPG is the P/E ratio divided by the average growth rate of EBITDA over the past five years.

From the back testing study from 1998 to 2008 we have found strong correlations between the predictability of businesses and the long-term return of stocks. The group of undervalued highly predictable companies performed the best. This group had an annualized gain of 20%, while the market just averaged 2.7% a year.

Both of the portfolios of Buffett-Munger Screener Top 25 and Top 25 Undervalued Predictable Companieswere started in January 2009. Since inception, the Buffett-Munger portfolio gained more than 102.68%, while the S&P 500 gained 82.84%, yet it slightly underperformed for the first half of 2013. The portfolio of Top 25 Undervalued Predictable Companies has gained 115.56% since January 2009, even higher than the returns of the Buffett-Munger portfolio in the same period.

Both the Buffett-Munger Screener and Top 25 Undervalued Predictable Companies select stocks from the companies that have the highest predictability rank. Top 25 Undervalued Predictable Companies Portfolio selects the stocks that are undervalued from DCF calculations. For the current list of undervalued predictable companies, go to the screener.

The other two model portfolios are for predictable companies that are traded at historical low P/S and historical low P/B ratios, respectively. Both of these two portfolios outperformed the market average in 2010, but were about even with the market year-to-date.

3. Historical low P/S: Companies that have high predictability rank, but are traded at historical low P/S ratios.

4. Historical low P/B: Companies that have high predictability rank, but are traded at historical low P/B ratios.

GuruFocus premium membership is needed to access the details of the portfolios and screeners. We also publish a monthly Buffett-Munger newsletter which features the picks from Buffett-Munger Screener. If you are a premium member, you can download this for free. If you are not a Premium Member, we invite you for a 7-day Free Trial.

Disclaimers: GuruFocus.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on GuruFocus.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The gurus may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall GuruFocus.com be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on GuruFocus.com, or relating to the use of, or inability to use, GuruFocus.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. The gurus listed in this website are not affiliated with GuruFocus.com, LLC.
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